EURGBP trend conditions remain bullish and the recent move lower appears to be a shallow correction. Support at the 50-day EMA, at 0.8624, remains intact for now. The cross needs to clear this average to suggest scope for a deeper pullback near-term. For now, attention is on the bull trigger at 0.8706, the Sep 26 high and bull trigger. Clearance of this level would confirm a resumption of the uptrend.
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JGBs sold off sharply on Sep 11 and the contract has traded through support at 145.49, the Aug 17 low. A clear break of this area would confirm a resumption of the medium-term downtrend and pave the way for weakness towards 144.39, the lower band of a MA envelope study. On the upside, clearance of 146.41, the Sep 4 high would instead highlight a base and a possible short-term reversal.
With few exceptions, SOFR/Treasury option trade centered on low delta puts and put spreads Friday as underlying futures traded weaker, see-sawing near the low end of Friday's session range. Rate hike projections through year end cooled: Sep 20 FOMC is 3.8% w/ implied rate change of +0.09bp to 5.338%. November cumulative of +8.2p at 5.410, December cumulative of 11.1bp at 5.439%. Fed terminal at 5.435% in Jan'24.